CBN Gets Buhari’s Nod On New Forex Regime

President Muhammadu Buhari has given the Central Bank of Nigeria (CBN) the go-ahead to introduce flexibility in the naira’s exchange rate.

The Senior Special Assistant Media and Publicity to the President, Mallam Garba Shehu made the disclosure in an interview on the Nigerian Television Authority (NTA).

He said: “The President is opposed to devaluing the naira, he has said so repeatedly.

“He has given them leeway to introduce what he has called ‘flexibility in managing’”

President Buhari has recently said that he supported a stable currency, though he would keep “a close look at how recent measures affect the naira and the economy.”

The comments, made few days after the CBN said it planned to introduce a more flexible exchange-rate regime, left traders guessing whether he supported those measures.

Nigeria has held the naira at N197-N199 per dollar since March 2015, even as other oil exporters from Russia to Colombia and Malaysia let their currencies drop amid the slump in crude prices since mid-2014.

Foreign reserves dwindled as the central bank of Africa’s largest oil producer defended the peg, while foreign investors, fearing a devaluation, sold Nigerian stocks and bonds.

Meanwhile, financial analysts have called on the Central Bank of Nigeria (CBN) to quickly release guidelines for the implementation of the new foreign exchange regime it announced last week, saying that this would clear up uncertainties surrounding the move.

The CBN Governor, Mr. Godwin Emefiele, had told journalists at the end of the apex bank’s Monetary Policy Committee (MPC) two-day meeting in Abuja, last Tuesday, that in line with the Committee’s decision, the regulator had resolved to introduce greater flexibility in the interbank foreign exchange market structure and to retain a small window for critical transactions for prospective investors.

He said the move was aimed at staving off an imminent recession, adding, however, that the CBN would release details of the operation of the market, “at an appropriate time.”

According to analysts and forex dealers, the delay by the CBN in releasing the guidelines may have sent mixed signals on its readiness to implement the new policy especially given the concerns that analysts had raised over the retention of a window for critical transactions.